Demand is linear p Aby cost is cy marginal cost is c What is

Demand is linear: p= A-by; cost is cy (marginal cost is c). What is oligopoly price and quantity when there are nplayers? What happens if n=1 ? How does total market supply compare to monopoly supply and competitive equilibrium when n=2? What happens to the total market supply as n goes to infinity?

Solution

Given,

P= A-bY

Cost = CY

MC=C

MR= dP/dY=A +A= 2A

TR= 2A

A= 1/2

MR=MC

2n = C

B) If n=2 then monopoly

the MC=MR

A=n

A=2

Supply is double

C) The supply is same both in oligopoly and monopoly

By,

Nishant Bhatt